From the bond market’s prospective the budget had more negatives than positives. Increase in fiscal deficit in the current fiscal year to 9.5% of GDP and target of 6.8% for FY22 was a surprise. This, along with the extended fiscal consolidation roadmap indicate that the bond market will face heavy supply pressure not just in this year but over many years. State governments may also pursue similar expansionary fiscal policy.
Nine big financial changes that you must watch out for in October
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